Private Markets The Texas Way

[Pages:16]Private Markets The Texas Way

December 2020

Overview of TRS: History & Mission

? History

o Established by State Constitution in 1937 o Paid out nearly $11.4 billion of pension benefits in FY 2019

? Mission

o Improving the retirement security of Texas educators by prudently investing and managing trust assets and delivering benefits that make a positive difference in members' lives

o Provides retirement and health benefits to over 1.6 million participants o One out of every 20 Texans is a member of TRS

? Size

o Trust Value: $155.2 billion as of June 30, 2020

? Return Targets

o Actuarial target returns of 7.25 % per annum

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Overview of TRS: TRS Investment Diversification Framework

The Trust is allocated across the following groups:

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Overview of TRS: Investment Management Division

Jase Auby

Chief Investment Officer

Emerging Managers, Kirk Sims

Risk and Portfolio Management, James Nield

External Public Equity, Brad Gilbert

Katy Hoffman

Chief of Staff

Energy, Natural Resources & Infrastructure,

Carolyn Hansard

Eric Lang

Head of Private Markets

Real Estate, Grant Walker

Private Equity, Neil Randall

Hedge Funds, Brad Gilbert

Internal Public Equity, Mohan Balachandran

KJ Van Ackeren Patrick Cosgrove

Sylvia Bell

Chief Operating Officer

Spec Opps,

Mohan Balachandran

Dale West

Head of Public Markets

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Private Markets Introduction

Private Equity, Real Estate and Energy, Natural Resources & Infrastructure combined target allocation is 35% of the overall Trust:

14% Private Equity

Target Allocation - Buyout (90%) - Venture (10%)

15% Real Estate

Target Allocation - Core (35%-45%) - Opportunistic (30%-40%) - Value Add (10%-15%) - Special Situations (10%-15%)

6% Energy, Natural Resources & Infrastructure

Target Allocation

- Value Add (50%-70%) - Opportunistic (20%-30%) - Core (10%-20%)

40-50 investment managers

40-50 investment managers

20-30 investment managers

Note: Figures as of 06/30/2020

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Private Markets Philosophy

? Culture and Team: Demonstrating the TRS IMD culture through collaboration, openness, candor and meritocracy of ideas. Hire and retain great investors for internal capabilities.

? World Class Investors through Partnership: Being the partner of choice for our managers using speed, consistency, predictability, and our people.

? Transparency: Using improved transparency through reporting and communication both internally and externally.

? Innovate: Utilizing unique partnership and investment structures. Focusing on technology and data; and continuously evolving.

? Value Driven: Finding value where others are not looking. ? Industry Leadership: Maintaining industry leadership roles across all private asset classes.

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TRICOT

Teacher Retirement Investment Company of Texas (TRICOT London)

TRS opened its London Office in November 2015. The London office demonstrates TRS commitment to the U.K. and European markets and provides:

Vision

To be the preferred destination for all attractive investment opportunities with our partners in Europe

Focus on the European market,

not just the UK

Replicate the TRS culture and values, and integrate

into the broader Trust

Source and execute accretive investments, and monitor / manage

them actively

Mission

To provide alpha, diversification and deep, local market knowledge

to the Trust through investing in European

markets

Develop strong, meaningful relationships

with all market participants

Develop local market knowledge to develop proactive viewpoints and

manage risks appropriately

Communicate effectively with Austin HQ and develop a strong

feedback loop

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Private Markets Overview: Organizational Structure

Private Equity 14% of Trust Benchmark

Neil Randall Managing Director BBA, Texas A&M MS, Texas A&M

TRICOT ? TRS LONDON

Kimberly Carey TRICOT Lead Director, RE BBA, Texas A&M

Emerson Halstead Investment Manager, ENRI BS, UT Austin MBA, Indiana University MA, Harvard University

Real Estate 15% of Trust Benchmark

Grant Walker Senior Director BBA, Baylor MBA, St. Edwards

Justin Wang Investment Manager, PE BBA, UT Austin

Stephanie Daul Associate, PE BBA, Texas State University

Sara Shan Contractor

Private Markets 35% of Trust Benchmark

Eric Lang Senior Managing Director BBA, UT Austin MBA, University of Houston

ENRI 6% of Trust Benchmark

Carolyn Hansard Director BS, UT Austin MBA, UT Austin

Private Markets Analytics

Tim Koek Director BA, Griffith University LLB, Griffith University

PRIVATE MARKETS ANALYTICS AND SUPPORT

Barbara Woodard, CPA Senior Associate BBA, Texas A&M

Tyler Kniskern Contractor BBA, New Mexico State University

Melissa Kleihege Analyst BS, Texas A&M

Jeff Stafford Senior Associate BS, Pepperdine University, Canberra

Sam Zedan Senior Analyst BA, University of Illinois

Susan White Junior Analyst BS, Penn State University

Portfolio Initiatives

LeAnn Gola, CPA Portfolio Initiatives Manager BBA, Texas State University MAcy, Texas State University

Nikhil Mothukuri Contractor B-Tech, JNTU, India MS, University of Hartford

Alex Huang Analyst BS, New York University

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